The United States District Court for the Eastern District of Texas on November 22 issued a nationwide injunction against the implementation of the U.S. Department of Labor’s Final Rule on, among other things, increasing the minimum salary threshold for an employee to be exempt from overtime. State of Nevada vs. U.S. Dept. of Labor. The Rule had been scheduled to become effective on December 1, 2016.
There remain several ways the saga might continue to unfold. The appellate court could stay the injunction pending resolution of an appeal. The appellate court could also keep the injunction in place while the appeal proceeds. As of this writing, the chances appear unscientifically to be about fifty-fifty. (The appellant would be the Secretary of Labor, but note that the next Secretary would not be obligated to continue an appeal begun by the current Secretary.)
If you have already restructured your compensation and/or staffing in order to comply with the new rule, you have the choice between retaining the new structure, which most organizations are likely to do, or reverting to the previous structure, which carries the risk that you will have to change once again if the injunction is stayed or the rule is reinstated after appeal.
The District Court’s reasoning for issuing the injunction is sound. The Court decided that the new rule had the effect of making an employee’s salary as important as their duties when determining whether the person should be exempt. Raising the importance of an employee’s salary to the level of their duties was contrary, the Court ruled, to the intent of Congress.